Instead of "evil" in that age-old debate. I'm glad he's giving Ryan the time; the Bachman debacle really did succeed in making Ryan seem sober and serious just by contrast. Yeah she's ridiculous, but she's not US history's most powerful Budget Chair. Focus, people. Real problems first, Ryan can actually do real damage:
Let me also highlight another point from that passage: Ryan warns that if we don't deal with our fiscal problems, we'll have to raise taxes and cut benefits for seniors. So what can we do to reduce the deficit? Well, government spending is dominated by the big 5: Social Security, Medicare, Medicaid, defense, and interest payments; you can't make a significant dent in the deficit without either raising taxes or cutting those big 5. Defense is untouchable, says the GOP; so that leaves the entitlement programs. And 2.7 of the three entitlement programs are benefits to seniors (70 percent of Medicaid spending goes on seniors).
So let's see: to avoid cuts in benefits to seniors, we must ... cut benefits to seniors.
I'm reasonably sure that Ryan hasn't thought any of this through.
One might differ with Krugman on the stupid v. evil thing, but tactically, treating Ryan as unserious and unworthy seems the better way to handle him. It's not dishonest anyway, he is saying really stupid things with a sober look and measured tones, so let's take him at face value rather than trying to read his soul.
Last Friday, I wrote a diary, "The moral battle of our age", in which I discussed Paul Krugman's Jan 13 column, "A Tale of Two Moralities". In it, I raised a number of objections to how Krugman was framing things, and I also linked to a diary by Teacherken Dkos, which raised a somewhat different, but not unrelated set of concerns. What's significant, though, is that this column by Krugman was obviously part of a process of trying to think things through, which can be seen in a number of his blog posts as well, as he tries to grapple with how economic and moral visions are interacting with one another. Some of what he's writing seems in need of criticizing--as, indeed, Dean Baker ably criticized an earlier blog post (which I hope to write about soon). But just after the column I wrote about, Krugman did a short blog post that I think was particularly on target, and therefore worth focusing on. Here's the first two paragraphs:
Monetary Morality
A further thought inspired by the meditations that led me to today's column: I think I now understand the otherwise weird resurgence of paleomonetarism in the midst of a prolonged liquidity trap. It's not really about analysis, it's about morality.
You see, if you're the kind of person who views being taxed to pay for social insurance programs as tyranny, you're also going to be the kind of person who sees the printing of fiat money by a government-sponsored central bank as confiscation. You may try to produce evidence about the terrible things that happen under fiat currencies; you may insist that hyperinflation is just around the corner; but ultimately the facts don't matter, it's the immorality of activist monetary policy that you hate.
I think this is a very crucial insight, which doesn't just apply to attitudes towards current evidence. It also gets projected backwards into historical justifications. Indeed, I would argue that eggregious libertarian misreadings of Locke's social contract theory have essentially the same "moral" derivations: people with a simplistic, Randian, "what's mine is mine" mentality simply cannot see the social aspect to social contract theory, even though it's right there in the name.
I also think this connects directly with what Brad DeLong was looking for some time back, in trying to understand why commonsense measures to reduce unemployment were not being undertaken. In "The Retreat of Macroeconomic Policy" he wrote:
Rather than pointing fingers or assigning blame, let us use this occasion to expand our moral imaginations, to listen to each other more carefully, to sharpen our instincts for empathy, and remind ourselves of all the ways our hopes and dreams are bound together.
I view that quality of empathy, of understanding and identifying with people's hopes and struggles as an essential ingredient for arriving as just decisions and outcomes.
Empathy is simply a codeword for an inclination toward liberal activism.
At one level, Krugman makes an important point, which is simply to remind us of what Lakoff taught us in Moral Politics: the liberal worldview is based on empathy and compassion, while the conservative worldview is based on an adversarial orientation that holds empathy in contempt as a form of weakness and indulgence. Which is a fairly fundamental reason why there is no fundamental equivalence between "extremists on both sides."
But that's just one level.
As it turns out, of course, the National Review is spectacularly wrong. The evidence by now is overwhelming that Obama's empathy is heavily skewed towards the haves and have-mores who oppose him and away from the have-nots and have-lesses who support him.
Right wing's breathtaking bait and switch on Tucson
In the week since the Tucson, Ariz., massacre, pleas for "civility" have turned into accusations of incivility, and the whole, useful discussion of "civility" versus "vitriol" has turned into the usual argument over competitive victimhood. The vast right-wing conspiracy has played President Barack Obama like a violin.
And they've done a pretty good job of messing with the heads of the liberal media as well. As a result, anyone who even raises the issue of who might be responsible, or more responsible, for the "atmosphere of vitriol" in which we conduct our politics is guilty of contributing to it. In just a few days, it has become the height of political incorrectness to suggest there might be any connection between the voices on right-wing talk radio and the voices in Jared Lee Loughner's head.
Moral: Empathy is for suckers, and Obama is the biggest of them all.
Bomb planted along MLK parade route in Spokane today (doubledown)
An incendiary device found along the route of a Martin Luther King Day parade in Spokane, Wash., was "likely capable of inflicting multiple casualties," the FBI said today.
A city employee found a backpack Monday morning, just before the parade was to start, in a parking lot that was both on the parade route and across the street from a performing arts center that hosted a pre-parade rally.
As this latest incident serves to remind us, the right simply can't help itself anymore. They can say whatever they want to when the spotlights are on, but the legacy of who they are will continue to have its way in the shadows. Like the scorpion in the story in The Crying Game, they can't help it: it's just their nature. There are already so, so many incidents that they've gotten a pass for in the past, and now that the fruits of violence have been raised to such a fever pitch and high level of visibility, they may have smooth-talked their way out of this one, as Kinsley argues, but they're all the more exposed for the next incident, and the next one, and next one after that.
America's housing bubble still deflating
As they failed to spot the bubble, most economists seem oblivious of the threat of further market falls to come Dean Baker
If house prices fall by 15% in 2011, the likely cut in consumer spending could cost 1% in GDP. Photograph: Reuters/Shannon Stapleton
How many economists does it take to see an $8tn housing bubble?
The answer to that question has to be many more economists than we have in the United States. Very few economists saw or understood the growth of the $8tn housing bubble, whose collapse wrecked the economy. This involved a degree of inexcusable incompetence from the economists at the Treasury, the Fed and other regulatory institutions who had the responsibility for managing the economy and the financial system.
There really was nothing mysterious about the bubble. Nationwide house prices in the United States had just kept even with the overall rate of inflation for 100 years from the mid 1890s to the mid 1990s. Suddenly, house prices began to hugely outpace the overall rate of inflation. By their peak in 2006, house prices had risen by more than 70%, after adjusting for inflation. Remarkably, virtually no US economists paid any attention to this extraordinary movement in the largest market in the world.
Had they bothered, they would have quickly seen that there was no plausible explanation for this jump in prices in either the supply or demand side of the market....
Therefore, it should have been easy for any competent to economist to recognise the housing bubble. Moreover, the dangers for the economy should also have been apparent. The boom in construction (both residential and non-residential) had raised its share of GDP by more than 3 percentage points above its long-term average. In addition, the creation of $8tn in housing bubble wealth predictably led to a consumption boom, as households spent on the basis of the new equity created by the bubble.
All of this presaged disaster for the time after the bubble burst....
Yet, almost no economists saw what was clearly in front of their eyes. They thought everything was just fine, until the house of cards eventually collapsed in 2007-2008.
Unfortunately, the reign of error is not over.
As with Iraq, the reward for being right is to continue being ignored. Baker continues, to explain the appearance of a new housing slump:
WaPo Editors Finally Realize The GOP Isn't Serious About The Debt
First Posted: 01- 3-11 12:37 PM | Updated: 01- 3-11 08:45 PM
For the better part of the past year, the editors of the Washington Post have been generically a-screech with worry over the deficits, and their insistence that the Obama administration needs to get serious about them. Well, today, the editors seem to have finally realized that the alternative is not much better, and that the GOP may actually not be all that serious about taming them either:
Are House Republicans serious about dealing with the deficit? You could listen to their rhetoric - or you could read the rules they are poised to adopt at the start of the new Congress. The former promises a new fiscal sobriety. The latter suggests that the new GOP majority is determined to continue the spree of unaffordable tax-cutting.
The ominous signs come in the wording of the new majority's version of its pay-as-you-go rules, which normally require that new programs or tax initiatives be covered with cuts to other programs or new revenue. In the GOP concept, pay-as-you-go applies only to spending programs. When it comes to tax cuts, it's all go, no pay. Taxes can be cut, and the national debt increased, without any offsetting savings.
The editors are referring to the new "cut-go" plan, which exempts tax cuts from the fiscal realities of the federal government's balance sheet. It seems to have caught them by surprise! Had they, say, availed themselves of their own paper's reporting, they might have caught a whiff of this coming from several million miles away. Let's check in with Washington Post reporter Lori Montgomery, circa September:
Even as they hammer Democrats for running up record budget deficits, Senate Republicans are rolling out a plan to permanently extend an array of expiring tax breaks that would deprive the Treasury of more than $4 trillion over the next decade, nearly doubling projected deficits over that period unless dramatic spending cuts are made.
For decades the Wall Street Journal editorial pages were famouse for this sort of thing, spouting off endlessly about an imaginary economic surreality of Laffer Curves, trickle down golden reigns of endless prosperity, self-regulating markets and tooth fairies, while its actual reporters did the best nothing-but-the-facts-ma'am business reporting money could buy, since they were writing for a business audience that had no desire whatsoever to be "spun" (aka deceived, taken for a ride, sold a bill of goods, etc.) when the result of dishonest reporting could well be financial disaster. The business model made perfect sense for the WSJ, whose readers presumably understood perfectly what was going on.
Evidence, logic and reason cannot explain conservative beliefs--ie about economics. Tribal myth-making can. This is a case in point
My previous diary, "GOP denial of reality complete: House adopts rules of fiscal madness", dealt with Paul Krugman's op-ed, "The New Voodoo", which warned of the institutionalized fiscal madness that House Republicans have now committed themselves to, the ice-cream-pizza-and-beer diet "fiscal discipline by cutting taxes." Most ominously, Krugman wrote:
How did Republican leaders reconcile their purported deep concern about budget deficits with their advocacy of large tax cuts? Was it that old voodoo economics - the belief, refuted by study after study, that tax cuts pay for themselves - making a comeback? No, it was something new and worse.
To be sure, there were renewed claims that tax cuts lead to higher revenue. But 2010 marked the emergence of a new, even more profound level of magical thinking: the belief that deficits created by tax cuts just don't matter. For example, Senator Jon Kyl of Arizona - who had denounced President Obama for running deficits - declared that "you should never have to offset the cost of a deliberate decision to reduce tax rates on Americans."
It's an easy position to ridicule. After all, if you never have to offset the cost of tax cuts, why not just eliminate taxes altogether?
The GOP madness is so transparent, and Krugman's platform so high that he just had to be attacked for saying this out loud. But there's nothing to attack him for. The GOP position is pure madness. So if there's nothing to attack him for, the solution is simple: just (1) make shit up and (2) ridicule him. It's Third Grade Bullying 101.
Take for example, Tom Maguire, whom Brad DeLong focused on over the week-end. DeLong used Maguire's feeble effort to go after bigger game: top Republicans silently signed on to this madness. But I'm happy enough to focus on Maguire himself, because he shows how entire mythologies get created with layer upon layer of BS to justify their biggest lies, lies such as "We have a spending problem, not a revenue problem." Or "tax cuts don't matter for the deficit." Here's DeLong:
Tom Maguire Says That All the Republicans Who Have Been Claiming to Worry About the Deficit Over the Past Two Years Are Liars
Tom:
JustOneMinute: One Day, When The Times Has An Economist As A Columnist...: The idea that deficits created by tax cuts don't matter is hardly new or magical, except perhaps to Krugman and any Times readers who lean on him for economic insight. IF YOU CAN'T TRUST FOX ON THIS: Per Fox, the Republican message has been that we have a spending problem, not a revenue problem. Very Ricardian, and how did Krugman miss it? SO WHO HAS ALZHEIMERS NOW, MR. SMARTY-MOUTH?
Seems like Tom is a bit harsh on his fellow Republicans to me. I think a bunch of them--people like Alan Greenspan, Paul O'Neill, etc., etc.--do worry about the deficit, but have been told to fall in line and be quiet for a while.
The most prominent feature here is trash-talking Krugman--in ALL CAPS, NO LESS! It drives conservatives crazy that the guy has a Nobel Prize and a prominent media platform, so trash-talking him helps build their group identity, and this group identity sustains them in the lack of any coherent set of facts, principles or ideology--the lack of which Krugman has just explosed. To actually discredit Krugman and his argument, Maguire would have to show that it's not delusional/magical thinking to diet on pizza, beer and ice cream cut deficits by cutting taxes.
But he can't do that, because it is magical thinking. So he does the best that he can: He tries to ridicule Krugman by pretending that the idea isn't new--that in fact it's well over 100 years olds, and associated with a venerable classical economist whom most conservative true believers probably never even heard of--David Ricardo--but it will make a really cool cover story, if they can all just get their stories straight.
But he can't do that, because Ricardo never said that tax cuts don't matter for deficits. So Maguire does the next best thing: he pretends that Ricardo said that tax cuts don't matter for deficits by implicitly equating it with what's known as "Ricardian equivalence" (hence "hardly new or magical" as Ricardo was early 19th Century) and he pretends that Krugman was just too obtuse to see it, even though Krugman had actually written about it before. (Hence the reference to ALZHEIMERS... MR. SMARTY-MOUTH!)
Unfortunately for Maguire, though, one of the things Krugman had written, which Maguire had missed, was the totally on-target prebuttal, "One more time" in which Krugman took aim at those who do "not understand the implications of their own model", in this case, Ricardian equivalence. In that prebuttal, Krugman had utterly demolished the basis of Maguire's "argument" if it can be called such, since Maguire's misunderstanding is even farther off the mark. But Krugman certainly demolished the authority of conservative economists on which Maguire relies.
This may all seem a bit overwhelming for non-economists, but split into bit-sized pieces, it turns out to be pretty easy to follow....
In the first half of 2010, impassioned speeches denouncing federal red ink were the G.O.P. norm. And concerns about the deficit were the stated reason for Republican opposition to extension of unemployment benefits, or for that matter any proposal to help Americans cope with economic hardship.
But the tone changed during the summer, as B-day - the day when the Bush tax breaks for the wealthy were scheduled to expire - began to approach. My nomination for headline of the year comes from the newspaper Roll Call, on July 18: "McConnell Blasts Deficit Spending, Urges Extension of Tax Cuts."
How did Republican leaders reconcile their purported deep concern about budget deficits with their advocacy of large tax cuts? Was it that old voodoo economics - the belief, refuted by study after study, that tax cuts pay for themselves - making a comeback? No, it was something new and worse.
To be sure, there were renewed claims that tax cuts lead to higher revenue. But 2010 marked the emergence of a new, even more profound level of magical thinking: the belief that deficits created by tax cuts just don't matter. For example, Senator Jon Kyl of Arizona - who had denounced President Obama for running deficits - declared that "you should never have to offset the cost of a deliberate decision to reduce tax rates on Americans."
It's an easy position to ridicule. After all, if you never have to offset the cost of tax cuts, why not just eliminate taxes altogether?
Why not, indeed? The new GOP position is the reductio adsurbum of the slogan, "We have a spending problem, not a revenue problem." It's a patently absurd claim on the face of it, but one that became GOP common "wisdom" during the campaign, leading Krugman to write a blitz of of op-ed and blog posts back in mid-to-late October, which I summarized in a Nov 1 diary, "Lies & consequences. Economic catastrophe edition.". Perhaps the single most compelling bit of evidence was the following chart from Krugman's "Why Have Deficits Exploded?", which showed that the exact opposite of the GOP claim was true: our problem is indeed a disastrous plunge in revenue, while government spending has increased at a relatively constant rate since a couple of years before the crisis hit:
The above chart represents cold, hard facts. It's what reality-based economics looks like. And Republicans are having none of it. As with global warming denial, Iraq's WMDs, the "success" of torture, or--for a majority of the GOP base--the belief that Obama is Kenyan, not American--they have their lies, their tribal articles of faith, and they're sticking to them. For them, their group cohesion as conservatives matters more than verifiable fact. When their leaders ask, "Who are you going to believe? Me or your lyin' eyes?", for them, the answer is a no-brainer. For us, the hope that Bush's political downfall and disgrace would lead to a return to reality-based politics has been bitterly disappointed, and this is what the descent into pure delusion looks like.
I've always been more of a Vampire Slayer man myself, but when duty calls.... The hunt for the lair of zombie lies takes us to Goerge Akerloff's early work introducing cognitive dissonance into economics.
Paul Krugman has been focusing increasing attention of late on so-called "zombie lies", ones that just keep coming back from the dead, no matter how many times they are killed. For example, from late last week:
Decade of the Living Dead
Barry Ritholtz expresses amazement at the way the Fannie-Freddie-CRA lie - the claim that gubmint bureaucrats forced all those poor bankers into making bad loans - not only persists, but seems to be growing in influence.
But this story is hardly unique. Ever since I began writing for the Times - and probably before, but I wasn't paying so much attention then - I've been struck over and over again by the unkillability of zombie lies....
The CRA aspect of this zombie lie leads directly back to Adam Kessler's lead article in the real-world economics review #54, "Cognitive dissonance, the Global Financial Crisis and the discipline of economics", which I wrote about in late October in my diary "Cognitive dissonance in free market economists". As you may recall, Kessler surveyed two groups of economists, one a random sample of members of the American Economics Association, the other [quoting from the abstract] "consisted of the signers of the notorious open letter circulated by the Cato Institute opposing President Obama's stimulus program," which he took to be representative of "an influential group of economists whom I call believers in laissez faire (BLF)."
One of the questions he asked about was the role of the CRA in the fiscal crisis, and he took the belief in this as evidence of cognitive dissonance, explaining, "I provide evidence which suggests that the BLF responded to this shock in a manner that can best be described as irrational, ill-considered and clearly erroneous. I consider the social-psychological concept cognitive dissonance as the best explanatory framework for understanding this response. Cognitive dissonance theory predicts that when real-world events "disconfirm" deeply-held beliefs this creates psychological discomfort in persons and they will respond by means of distortion and denial."
This is, in short, Kessler's explanation for zombie lies--at least among the hard-core believers in the economics profession. It doesn't answer Krugman's question in full, about why such zombie lies persist, not just among true believers, but among the wider political class. But it does provide a starting point, one worth taking a closer look at, particularly in terms of George Akerloff's original introduction of the idea of cognitive disonance into the economic literature, "The Economic Consequences of Cognitive Dissonance", by George A. Akerlof and William T. Dickens, written in 1982, which I also quoted from in my diary. (Not available online, but from the JSTOR database available in some libraries.)
Akerloff and Dickens looked at the example of workers in a hazardous industry under two conditions: First, without any safety equipment avaialble, then after such equipment becomes available. They find that workers tend to minimize the hazardous they face in the first instance, with the result that they generally fail to use the safety equipment once it becomes available--an objectively irrational course of action predicated on a false belief that at least afforded psychological comfort when no real comfort was available.
As similar dynamic seems at play with our zombie lies: They may have never been true, but at least they provided some psychological comfort, and therefore people cling to them, even when the danger that doing so posses should be utterly transparent. From the original 1982 article:
Paul Krugman in what may be his finest blog post articulates a fear I have had but been unable to properly express:
But watching the failure of policy over the past three years, I find myself believing, more and more, that this failure has deep roots - that we were in some sense doomed to go through this. Specifically, I now suspect that the kind of moderate economic policy regime Brad and I both support - a regime that by and large lets markets work, but in which the government is ready both to rein in excesses and fight slumps - is inherently unstable. It's something that can last for a generation or so, but not much longer.
By "unstable" I don't just mean Minsky-type financial instability, although that's part of it. Equally crucial are the regime's intellectual and political instability.
The failure here is not the policies themselves, but the 2nd and 3rd order intellectual and social structures that maintain sufficient social support for the policies of curtailed capitalism and the state enforcement of broad social mobility and equality. In this sense, I say the New Deal did fail, because it failed to sustain itself much past the generation of people who lived through the crisis that made it possible. It is getting harder to protect Social Security because with each passing year there are less people with living memory of what life was like without it. Those people were generally immune to the propaganda, but those of us left behind lack that personal connection to seeing retired people reduced to begging and literally dying in gutters and under bridges.
That's what we have to account for if and when we create the conditions to implement a New New Deal. How to make the liberal consensus not only strong enough to do it, but self sustaining?
The kindest thing we can do now is pretend the whole thing never happened.
But the bulk of the post highlighted something else that's just important in its own way:
[A]nyone can come up with some good deficit-reduction ideas; I can come up with a dozen even before I've had my morning coffee. Brainstorming is easy.
What the commission was supposed to do was something much harder: it was supposed to produce a package that Congress would give an up and down vote. To do this, it would have to produce something much better than a package with some good stuff buried in among the bad stuff; it would have to produce a package good enough to accept as is.
And it didn't do that. Instead, it produced a package that may have had some good things in it, but also, remarkably, introduced a whole slew of new bad ideas that weren't even in the debate before. A 21 percent of GDP limit on revenues? Cutting the top marginal rate to 23 percent? Sharp reductions in the government work force without, as far as anyone can tell, a commensurate reduction in the work to be done? Instead of cutting through the fog, the commission brought out an extra smoke machine.
Krugman sees the Catfood Commission quite clearly at one level. That last line put it perfectly. However, Krugman misses it completely at another level: He thinks it's a bug, when of course, it's a feature. What better way to advance rightwing ideas no one was even seriously thinking about during a Democratic Administration and a Democratic Congress? Rightwing ideas such as those Krugman just enumerated in that very same paragraph.
Sure, they have only the vaguest relationship to deficit reduction, and introducing them like this out of the blue does nothing to fulfill the supposed purpose cover story of Catfood Commission. So what? The cover story was only essential for getting the Commission launched. It remains useful of course, for continuing to bludgeon folks with the co-chairs' failed potpouri. But no one has to take it seriously when it no longer suits them--any more than deficit chickenhawks have to take themselves seriously when it's time to cut taxes on the rich & the super-rich.
If this is confusing to anyone, that's precisely the point. Conservative economic policies aren't supposed to make sense. They're supposed to make dollars. Billions and billions of them. Policies that make sense and/or honest deliberative processes that remain grounded broadly supported public principles will almost invariably emerge with a strong "liberal bias", the same way that majorities of self-identified conservatives will support a majority of welfare state programs. Confusion must be introduced at multiple points at multiple levels in order to come out with any sort of "acceptable" conservative policies.
It is, in fact, the same principle of sowing doubt and confusion that Naomi Oreskes and Erik Conway document in their recent book, Merchants of Doubt: How a Handful of Scientists Obscured the Truth on Issues from Tobacco Smoke to Global Warming, but with one crucial difference: In science, the standards of conduct and proper procedure are far better established, and the so the generation of spurious doubt and confusion is much more obvious, and much more clearly identifiable. But the game is fundamentally, at bottom, still the same. Create confusion, create uncertainty, create delay, introduce false issues, introduce false solutions, shift the debate, introduce wild accusations, etc., etc., etc.
Many had hoped that Obama would be like FDR, a Democratic President with a Democratic Congress, cleaning up the mess made by Republicans and ushering in a new era of Democratic dominance. This was true even of folks like me, who were not so sure about Obama himself, but felt that the sheer necessities of the time would "force greatness onto him." Instead, what we see is almost the exact opposite. It's far more like LBJ in Vietnam--ignoring reality, running scared of GOP attacks, splitting his own party, and ending its long period of dominance.
A reality-based President might want to redouble efforts to solve realworld problems, such as, oh, I dunno, maybe the worst recession since the Great Depression?
A delusional President? Not so much.
Let's review how we got here, shall we? Skip the whole part where Republicans and neo-liberal Dems destroyed the economy, and let's concentrate on how "bipartisanship" and the often futile quest for it completely crippled any chance of a true recovery. It's painful, I know, but a review is certainly in order to remind folks of just how much effort there was for a "bipartisan" solution, and just how much this involved ignoring both reality, and those terribly extreme economists who continued paying attention to it.
Aiming to foster bipartisan support for his record-setting economic stimulus, President-elect Barack Obama plans to propose huge tax cuts for businesses and middle-class workers that will total about 40 percent of the package, or up to $310 billion, congressional officials said.
The revelation is part of an intricately orchestrated rollout of the plan that includes an appearance by Obama on Capitol Hill on Monday and a major speech about the economy later in the week.
Obama plans to ask Congress for a stimulus package of $675 billion to $775 billion, so the planned tax cuts will total about $270 billion to $310 billion, the officials said.
Obama strategists say he wants to get 80 or more votes in the 100-member Senate, and the emphasis on tax cuts is a way to defuse conservative criticism and enlist Republican support.
But officials say the tax cuts will be based on historical and empirical evidence of what works, not ideology. Rather, the targeted tax cuts will be designed to stimulate job growth in the private sector and help middle class families, the officials said.
So three things: (1) Obama wanted to gain broad bipartisan support, (2) So he included massive tax cuts--40% of his proposed stimulus package, (3) which he claimed would be based on what works.
How'd that work out?
He did include massive tax cuts. But they weren't based on what works, because tax cuts don't work (they average about 2/3rds the effectiveness of government spending). And he didn't get broad bipartisan support, he had to grovel and sell out school kids just to get a measly three GOP votes in the Senate (and none in the House.)
None of this was really a surprise. Paul Krugman, for one, immediately pointed out the inadequacy of the plan (more on this below), while it only took a couple of days after the inauguration for senators to unveil their opposition. From the very beginning Republicans were hostile, as were Blue Dog Dems like Evan Bayh. As Time reported on January 22, 2009 ("Economic Stimulus Plan Hits Bipartisan Obstacles":
Two years ago, a post-Bush Republican Party that couldn't find itself on Google Maps was thoroughly thrashed for the second time in as many elections. The GOP had lost over 50 House seats over two election cycles, scores of state legislative chambers, governorships, US Senate seats, and the presidency to a guy named Barack Hussein Obama.
The latter, something most observers thought wouldn't happen in the United States until some time between the next arrival of Haley's Comet and when Kevin Costner evolves into a fish-humanoid hybrid to live on an Earth covered by H20.
It's amazing what can happen, however, when you have a Democratic president who doesn't live up to many of his core progressive promises, who blames his base for asking him to, and whose communications people, to quote Democratic National Committeeman and CNN Contributor Robert Zimmerman, "... couldn't sell cocaine to Charlie Sheen."
The results were on display this past Tuesday, when an American public tired of being unemployed, scared about their future, and looking for some kind of leadership, handed over the US House - in stunning fashion - to a coterie of cranks who have to put corks on the end of their forks not to jab their own eyes while eating. Think Steve Martin's Ruprecht from Dirty Rotten Scoundrels, and you get the basic picture of some of the Tea Party proxies we elected to Congress last week.
My former colleague Peter Diamond, along with Dale Mortenson and Chris Pissarides, has won the Nobel. Richly deserved. The prize is for work on frictions in markets, which is very important stuff; but Peter, an incredibly profound thinker, has done much much more.
And yes, this is the same Peter Diamond whose nomination to the Fed board has been held up because of Republican doubts about his qualifications.
Here's Krugman's earlier post on the blocking of Diamond:
Peter Diamond, Macro Maven This is disgusting: Senate Republicans holding up Peter Diamond's nomination to the Federal Reserve Board on the grounds that he may not be qualified to make monetary policy. Aside from the fact that the same Senators cheerfully confirmed Bush nominees who didn't know much about economics of any kind, this is especially stupid right now.
Diamond is exactly the man we need - which, given the way things have been going lately, probably means he won't get confirmed.
Update: Some commenters note, correctly, that there's an ongoing dispute over what the rise in vacancies without a corresponding fall in unemployment means. But that's precisely the point: we want Peter Diamond, who pioneered the whole study of this subject, in the Fed, where he can help make sense of the situation.
But there's really not that much new about this. Republicans have long had contempt for science, and for the Nobel Prize (whether or not you count economics as a "science"). All that's different now is that they fillibuster everyone in sight. But the Nobel prize is purely an incidental matter so far as that's concerned.
Paul Krugman had a typically restrained response to a profile by one of the dumbest Versailles scribes around. In fact, it was more than just restrained, it took the opportunity to make a very telling point... or two:
One thing I'd note, however: there's a hint in Kurtz's article of an attitude one sees all the time - namely, that there's something inauthentic about people who complain about current policies and the state of the economy when they are personally doing well.
This brings to mind a review I once read of a bad movie in which Mel Gibson played a Revolutionary War patriot. The film made a point of showing the Gibson character as being apolitical - until the British did him personal harm; that's when he got involved. As the reviewer pointed out, this gets the notion of patriotism all wrong - you're supposed to care about the cause regardless of your personal interests. In fact, there's something especially laudable if you oppose a regime even though you were doing fine under that regime.
Of course the fact that conservative icon Mel Gibson has no idea what patriotism is about should hardly be surprising, much less shocking. But what is distressing is how dimly even most liberals are aware of what's wrong with it. However, it's actually part of a much wider phenomena, which Salon's Heather Havrilesky mused upon in a recent column, "Will 'The Event' just get 'Lost'?", where she writes:
Similarly, though, pretty much every single character on "The Event" seems to want something so bad they could kill for it, from the mysterious lady locked in the government facility at Mount Inostranka in Alaska to the scared pilot who hijacks a plane because he's afraid some masked strangers are going to execute his two daughters. The big trouble with "The Event" isn't that the stakes aren't high enough (they're sky-high) or that the characters don't have clear motives for taking the desperate measures that they take. The real problem is, we don't care because there clearly isn't any larger meaning guiding the action, and the only thing we know about each character is that he/she totally loves his/her fiancé/wife/husband/children sooo much that he/she would do anything to keep them safe.
In a country where many viewers don't have a lot of thoughtful or idealistic notions outside of a "love of family" -- worthy though this love obviously is -- this is what passes for character development and premise, over and over again. Even on the most popular TV shows and movies out there, this is often the one humanizing factor, the one guiding principle, the one very simple central thrust of the entire narrative. Even in a smart psychological thriller like "Inception," what do you ever know about Leo DiCaprio's character, other than that he loves his wife and wants to get back to his kids? What should merely be a character's motive stands in for almost everything else, so that all we get is an enormous layer cake of action, all balancing on the faces of two young children. By the time we see the kids' faces, I half expect them to be hideous monsters or extraterrestrials. (If only.)
What Havrileskyis describing is the minimal self of neo-liberalism, for whom all higher things have either been commodofied, or reduced to single-minded love of family. Given this, there simple is no possible foundaiton for a truly democratic politics of any sort, much less for actual patriotism.
And that realization adds a much deeper level of resonance and pathos to Krugman's conclusion:
So, let's see: letting the high-end tax cuts expire on schedule is good economics; picking a fight with Republicans over the issue appears, from all the polls, to be very good politics - and that's despite what has so far been an incredibly lame effort to explain the issues.
Besides, Democrats should be inclined to take risks in any case: if nothing shakes up the game, they lose the House and possibly the Senate, if they shake things up, they might hold on.
And yet, it's still not clear whether they'll force a vote on a middle-class-only tax break?
Pelosi Implores Dems On Tax Cuts: 'Who Do You Stand With?'
Christina Bellantoni | September 14, 2010, 10:50PM
Speaker Nancy Pelosi tonight implored House Democrats in a private meeting to consider a pre-election vote on extending the Bush-era tax cuts for the middle class while letting those for the rich expire, framing the debate in partisan terms.
Rep. Sheila Jackson Lee told TPM after the caucus that Pelosi ended the meeting with a "resounding" and impassioned speech that fired up the Democrats and might even have brought more on board for a vote.
"She made it clear it's a black and white issue of who do you stand with," Lee told TPM. "It's the middle class and they need to know we are pushing for them. We have to say it over and over again. They've gotta see it, smell it, sense it, taste it."
Lee (D-TX) said that Democrats should be as consistent as President Obama has been, and attempt to define the Republicans as favoring the rich.
As we highlighted earlier, Democratic leaders were in temperature-taking mode tonight. They laid out several options for voting now, but tried to listen to members to get the discussion started since everyone had only been back in town for five hours.
Pollster Stan Greenberg also presented the caucus with some data showing the tax cuts issue helps energize the base, a stat members responded to well, a Democratic aide present during the meeting told TPM. The aide said some members suggested that tax cuts could be moved quickly, or that it wasn't an issue for them back home, but that most members were supportive of Pelosi's position.
TPM spoke with several Democratic members on background and they confirmed that there was not a clear consensus to emerge out of the meeting. Most said they think leadership will put forward a vote to extend the middle class tax cuts only, but perhaps allow for a procedural vote that would satisfy those members who want to at least be on the record for extending the cuts for every income bracket.
The most plausible explanation for all this is that Democrats are afraid that even the mere mention of taxes means their doom. As if the GOP won't mention taxes if the Dems don't pick a fight? What kind of crazy is that?
It's fear-based crazy, that's what. And since the GOP is the party of fear, as long as the Dems are coming from fear, they are playing on GOP's home turf, by the GOP's own rules. As I've been trying to explain recently, there's a very clear clash of civilizations going on here: A fear-based, top-down anti-modernist "civilization" (if you can call it that) vs. a reality-based, bottom-up modernist and post-modernists civilization. THe Dems have been scared out of their wits by the GOP, thus abandoning the civilization that they're supposed to be defending. Not all the Dems, mind you. But enough of them to cripple the party as a whole. And that's what we're seeing play out here. It's really just as simple as that.
"We have nothing to fear, but fear itself." -- Franklin Delano Roosevelt.
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